• VRS January 1, 2013 Benefit Changes Affect Plan 1 Non-Vested and Plan 2 Members  
• Plan 1 Employees Who Will not Be Vested on January 1, 2013
• VRS Webinars on Purchasing Service (August 9, September 6, and October 4) 
• Visit VRS Website for More Information 
• Summaries

The City provides retirement benefits for full-time, regular employees who are classified as General Schedule Employees, Deputy Sheriffs, Medics, and Fire Marshals through the Virginia Retirement System (VRS).  VRS eligibility, contributions, and benefits are determined by the Virginia General Assembly and are subject to change.  The General Assembly enacted a number of benefit changes during the 2012 legislative session that will take effect on January 1, 2013.  These changes are in addition to the contribution changes that were effective on July 1, 2012. 

Following is a summary of the January 1, 2013 benefit changes.  These changes will affect Plan 1 members who are not vested on January 1, 2013 (Plan 1 Non-Vested) as well as Plan 2 members.

• The Retirement Multiplier used in calculating the retirement benefit will change from 1.7% to 1.65% for all members except Plan 1 members who are vested on December 31, 2012.
• Average Final Compensation, which is used in the monthly retirement benefit calculation, will be based on the average of an employee's 60 consecutive months of highest compensation as a covered employee. The benefit calculation for Plan 1 members who are vested on December 31, 2012, will continue to use the average of the employee's 36 consecutive months of highest compensation as a covered employee.
• The earliest unreduced retirement date will be the earlier of: a) Normal Social Security Retirement Age (66 - 67 depending on year of birth) with at least five years of service; or b) when age plus length of service equals 90.  Plan 1 members who are vested on December 31, 2012, will be eligible for retirement at the earlier of a) at least age 65 with five years of service; or b) at least age 50 with at least 30 years of service.
• The Earliest reduced retirement date will be at least age 60 with at least five years of service. Plan 1 members who will be vested on December 31, 2012, are eligible the earlier of a) at least age 55 with five years of service; or b) at least age 50 with 10 years of service.
• Cost of Living Adjustments (COLA) will begin July 1 after one calendar after retirement for employees eligible for an unreduced retirement and employees eligible for a reduced retirement with at least 20 years of VRS service.  Employees retiring with a reduced retirement with less than 20 years of VRS service will receive their first COLA July 1after one calendar following their unreduced retirement eligibility date. This provision does not apply to disability retirement.  Additionally, VRS has indicated that this provision does not apply to employees who will be within five years of qualifying for an unreduced benefit on January 1, 2013.
• The maximum COLA will be three percent. Plan 1 employees who are vested as of December 31, 2012, have a different COLA maximum and should visit the  VRS website  for more information.
• A hybrid plan will be effective on January 1, 2014. VRS will provide more information on this new plan affecting VRS covered employees beginning January 1, 2014, and current employees who may want to transfer to this plan.

Plan 1 VRS Non-Vested members will be affected by all of the VRS changes effective January 1, 2013.  Plan 1 members include employees who became VRS members prior to July 1, 2010, and who still have Plan 1 service accrued either with the City or another VRS covered employer.  VRS members are vested after they accrue five years of service in VRS.  

Employees may determine their Plan 1 or Plan 2 status and their vesting status when they visit the VRS website .  After registering and logging onto myVRS Access the first screen that appears provides plan and vesting status. For help with logging onto myVRS or viewing personal information, call VRS at 888.827.3847 from 8:30 a.m. to 5:00 p.m. Monday to Friday.

Plan 1 Non-Vested members may want to review the rules on purchasing prior service to determine if there is eligible service they may purchase to become vested on January 1, 2013.  Eligible service to purchase includes public service (federal, state, city, county, town, Peace Corps), active military service, certain types of leave and refunded VRS service. The Spring 2012 edition of Member News has an article titled “Non-vested Plan 1 Members: Purchase Prior Service Now” for Plan 1 Non-Vested members.  Interested employees may also visit the  VRS website , click on the Members tab and then the Plan 1 tab to find the link “Purchase of Prior Service.” 

Purchased service counts as vesting service and as service to calculate retirement benefit.  For employees currently in a payroll deduction contract, VRS will count service purchased by December 31 to determine if they are vested on January 1, 2013.  Unfortunately, due to IRS regulations, payroll contracts cannot be broken, and VRS will not count service employees are contracted to purchase but have not purchased by December 31.

VRS will provide three seminars to provide information on purchasing prior service and how it could help eligible employees become vested by January 1, 2013.  Employees may view the webinars from their work computer if they obtain permission from their supervisor.  The webinars will be held:

Here is a  link to the VRS site that will let you register to view any of these webinars.  Be sure to obtain permission from your supervisor to view these webinars at your desk during work hours.

The Pension Administration Division will show the August 9 and September 6 webinars in Sister Cities 1101.  You do not need to register to attend these sessions.

Employees should visit the  VRS website  often for detailed information on and updates to the plan.  After logging in, employees can view their personal information, including the Member Benefit Profile that provides employees with retirement estimates.  VRS creates the Member Benefit Profiles (annual statement) by the end of August each year.  Employees can also estimate retirement benefits for a future date.  The benefit estimator is still being updated with the plan design changes that are effective January 1, 2013. 

Employees approaching retirement may be interested in the Retirement Planner, which employees can access by logging in to their VRS information.  This planner may help future retirees determine their income and expenses during retirement.

VRS representatives are available to answer employee questions Monday to Friday from 8:30 a.m. to 5 p.m. Monday to Friday.  The toll-free number is 888.827.3847.

Following is a chart comparing benefits for Plan 1 members, Plan 1 Non-Vested members, and Plan 2 members.  Additionally, the following summaries are provided to new employees during Orientation.

• Chart Summarizing Changes for City of Alexandria Employees 
• Summary of Retirement Benefit Plans for General Schedule Employees (August 2012)  
• Summary of Retirement Benefit Plans for Deputy Sheriffs, Medics, and Fire Marshals (August, 2012)